Since 2000, Caterpillar, the massive Peoria-based heavy equipment company, has avoided paying over $2 billion in U.S. taxes by using a legal maneuver to transfer the lion's share of its profits to a wholly-owned subsidiary in Switzerland.
Many people were upset with Caterpillar when they learned this. But last week Kentucky's junior senator Rand Paul said they deserved an award, praising the company for following through on their obligation to shareholders.
In the interest of full disclosure, I should point out here that I am one of those Caterpillar shareholders. And yes, I have to side with Caterpillar on this one. Apparently, all their bookkeeping moves have been completely legal under the U.S. tax code, and American corporate law DOES require publicly-owned companies to act in their shareholders' best financial interests.
But an award? Come on, Senator Paul.
Instead of simply pointing to the rule book, what Senator Paul should be doing is spearheading an investigation into the tax code that makes such a tax dodge possible. Companies shouldn't be allowed to transfer profits to overseas entities that are created solely for that purpose. It's a misrepresentation of their obligations as members of the American business community, and grossly unfair to the average taxpayer – or, for that matter, smaller businesses with fewer resources.
I may be a Caterpillar shareholder. But I'm also an American.
I'm Bill Lamb, and that's my Point of View.